Since late 2007, the United States and a number of other countries, including Australia, Canada, the European Union, Japan, Mexico, and South Korea, have been negotiating an "Anti-Counterfeiting Trade Agreement" (ACTA). The aggressive timetable of the negotiation effort, together with a pronounced lack of transparency, create a risk that controversial or ill-advised provisions could find their way into the final text of an agreement with no meaningful opportunity for debate or modification.

Since late 2007, the United States and a number of other countries, including Australia, Canada, the European Union, Japan, Mexico, and South Korea, have been negotiating an "Anti-Counterfeiting Trade Agreement" (ACTA). The aggressive timetable of the negotiation effort, together with a pronounced lack of transparency, create a risk that controversial or ill-advised provisions could find their way into the final text of an agreement with no meaningful opportunity for debate or modification.

ACTA’s stated goal is to establish a new set of high standards for enforcement efforts to combat "counterfeiting and piracy." ACTA would be separate from existing international agreements and institutions such as TRIPS, the WTO, and WIPO. It would set benchmarks regarding intellectual property enforcement, which individual nations could then adopt and (probably more importantly in the view of U.S. negotiators) press other nations to adopt.

Beyond the broad statement of goals, however, there is little public information about what specific provisions or commitments negotiators envision. The Office of the United States Trade Representative (USTR) has issued a Fact Sheet outlining three categories of expected provisions. The first category is "International Cooperation," which according to USTR could include measures relating to technical assistance and improved cooperation among different nations’ enforcement agencies. The second category, "Enforcement Practices," could include "best practices" on subjects like public/private advisory groups, specialized training for intellectual property enforcement personnel, and public awareness campaigns. The third category, "Legal Framework," appears largely open-ended, calling for a "strong and modern legal framework" in areas such as criminal enforcement, civil enforcement, border measures, optical disk piracy, and – importantly for CDT – "Internet distribution and information technology."

These general categories and accompanying examples offer limited insight into ACTA’s likely scope and details. They give no specifics concerning what ACTA might actually require on the enumerated topics, and to date no text of any possible provisions have been released.

In February 2008, USTR requested public comments in response to its Fact Sheet. CDT submitted comments as part of a group that included the Consumer Electronics Association, NetCoalition, the Library Copyright Alliance, and Visa. CDT and its fellow commenters argued that ACTA’s focus should be enforcement of current I.P. law against bad actors engaged in commercial-scale counterfeiting or infringement. The comments cautioned against delving into substantive issues of I.P. law or imposing special burdens on online intermediaries.

(2) Substantive Concerns About Possible ACTA Provisions

CDT supports the goal of promoting more effective enforcement of intellectual property rights on an international basis. Counterfeiting and large-scale infringement are serious problems, and changes in technology present new enforcement challenges.

With respect to the three categories of possible ACTA provisions, CDT welcomes efforts to improve international cooperation. Similarly, provisions regarding enforcement practices could be useful. One caveat is that to the extent ACTA provisions on enforcement practices call for advisory groups or public awareness campaigns, the resulting efforts should reflect an appropriate balance of views and interests rather than simply the viewpoint of a particular industry segment.

The "Legal Framework" category, however, raises potential concerns.

First, any provisions requiring the United States to modify its substantive intellectual property law would raise major red flags. I.P. law involves a careful balancing of competing interests, which in turn requires an open and participatory process where the full range of interests can be heard. Changes should be worked out through the legislative process, not in closed-door negotiations.

To its credit, USTR has reportedly indicated that it does not intend for ACTA to stray beyond the existing U.S. legal framework. But U.S. I.P. law features many unsettled and disputed issues. It is hard to stay reliably within the existing legal framework when the boundaries of that framework are often unclear. Even if ACTA does not require a change to black-letter U.S. copyright statutes, therefore, there remains a significant possibility that it could tip the scales – intentionally or unintentionally – in important legal disputes regarding how those statutes should be interpreted.

For example, the question of when device or service providers should be held secondarily liable for copyright infringement committed by their users is a hotly debated area with multiple stakeholders and perspectives. So are questions relating to whether service providers should monitor, police, and share information about their customers; the scope of "safe harbor" provisions in the Digital Millennium Copyright Act (DMCA); and the application of the DMCA’s anti-circumvention provisions. An ACTA "Discussion Paper" leaked and posted on wikileaks in May suggested that negotiators were at least considering provisions that could touch on these kinds of questions. Thus, ACTA could well be used to bolster certain arguments in important ongoing legal debates.

Concerns that ACTA might wade into complex and controversial issues are reinforced by comments submitted to USTR by interested parties. For example, the Recording Industry Association of America (RIAA) suggested including a number of provisions relating to potential liability and legal obligations for ISPs and other intermediaries. Among the suggestions was a requirement that ISPs employ technological filters to weed out infringing material; the imposition of liability for providing "deep links" to infringing material; and the imposition of liability on ISPs that fail to respond to takedown notices within 24 hours. The comments of the Motion Picture Association of America (MPAA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) likewise suggested that ACTA should address matters like secondary liability and the role of ISPs.

In addition to treading into areas where U.S. law is unsettled, ACTA could venture into matters on which participating nations have strikingly different legal rules. For example, some European countries treat goods as counterfeit not only if they are fakes, but also if they are real (lawfully manufactured) goods sold through distribution channels not authorized by the trademark owner. Secondhand sales, therefore, could be treated as counterfeit. U.S. law rejects this broad (and arguably anticompetitive) view of counterfeiting. Similarly, the recent U.S. court ruling in eBay v. Tiffany – which refused to hold eBay broadly liable for sales of counterfeit trademarked items by its users – suggests that the United States and France may have sharply different approaches to auction site liability for counterfeit trademarked goods.

In short, terms like "counterfeiting" and "piracy" may have significantly different meanings in different countries. ACTA provisions tied to such terms could have the effect of creating new penalties and legal risks not just for clearly bad behavior, but also for behavior that is perfectly legitimate under the U.S. legal regime. Such consequences, and the risks they could pose to arguably legitimate activity, demand careful consideration.

In the absence of official draft text, there has been considerable speculation about what precisely an agreement might contain. There have been rumors, for example, that ACTA will call for extensive laptop and even iPod searches at border crossings, or will mandate copyright filtering by ISPs.

Perhaps certain rumors will prove unfounded. But the overarching problem with ACTA is that it is impossible to know in advance the specifics of various provisions under negotiation; once the details are disclosed, it may be too late. The process thus far has afforded very little transparency. Yet an official declaration at the G8 Summit in July 2008 confirmed that negotiators are aiming to conclude an agreement by the end of this year. That raises the dangerous prospect that a final text could be developed and presented as a fully baked, take-it-or-leave-it package, with no meaningful chance for input or debate on specific individual provisions.

Perhaps an accelerated process that skips the step of gathering and considering reactions to specific agreement language would be acceptable if the only parties likely to be affected were the I.P. rights holders and the bad actors (counterfeiters and "pirates"). I.P. enforcement tactics and procedures, however, can affect a much broader range of consumers and businesses. This is particularly true where the enforcement questions on the table include "Internet distribution and information technology," as USTR has stated here. For consumers, enforcement tactics can raise privacy, free expression, and due process issues. For online innovators and businesses, there can be serious issues of liability exposure and impact on innovation.

In sum, the specifics of ACTA could well raise issues of broad concern or impact – perhaps much broader than negotiators or drafters may initially anticipate. There is no substitute for a transparent process that allows for careful scrutiny and input by the full range of potentially interested parties. Online reports at Arstechnica.com have suggested that negotiators in some cases may be working closely with selected members of the rights holder community. But consulting only with a few handpicked partners would likely lead to a narrow, slanted, and incomplete understanding of the policy issues at stake. The negotiators of ACTA, and in particular USTR, need to open up the process.

On September 15, 2008, CDT joined a broad group of civil society signatories on a joint letter calling on ACTA negotiators to immediately publish any draft text or pre-draft discussion papers before proceeding with negotiations.